View Full Version : Of Letters of Agreement and Getting Paid

06-24-2003, 09:32 AM
**Update on Page 2**

I know this stuff comes up from time to time, but I thought I'd ask anyhoo.

First, a little background:
After a long time of struggling and doing work for little/no money, I finally landed a decent project. A video producer I know was doing a product video for a company that wanted some animations. After going over the general idea of what they wanted, I gave him my price. Now, this being my first "big" project, and wanting to secure the job, I cut my bid by quite a bit (and was sure to point that out). Also, judging by the examples from other videos of what they wanted, they were going to receive a far superior product.

So finally, after script revisions etc... I was called in and we went over what they wanted. The job looked like it was going to entail more than I had originally figured, but that was okay. I kept the price where it was.

The way it was set up, I'm working as a subcontractor for the video producer. I told him that I needed 50% to start work. No problem. I went to his place the next day with an invoice and letter of agreement. I got the first check, but the guy said he'd have to look over the letter. Since he'd anted up, I didn't push it. This was my big mistake as I never did get that letter signed.

I've since completed the work. Actually, I delivered over two weeks ago. I figured that there might be some touch ups to do, but I keep getting told to hold off and see what needs to be done. All reports I've gotten say that they're very happy with the animations, but there seems to be a lot of feet dragging in getting things done on the other end (and the fact that the producer has been out of town for a week hasn't helped).
I talked to the producer yesterday. The video was completed, but he said that they (yet again) have an "overwhelming" number of revisions they want done and that he'd get with me today after they get things hammered out.

Now for my questions:
At what point should I consider the job "done" and be expecting final payment? I don't doubt I will get paid... eventually. Just that it's sounding like the revision process might go on for a while and I had hoped to put some of this money toward the 7.8-8/DFX upgrade. My letter of agreement (though unsigned) stated that final payment is due upon completion of the project. That was supposed to mean upon delivery of the animations, with added costs for any changes afterward, but I guess it could be construed as meaning the end of the entire project. Is it unfair or otherwise frowned upon to ask for payment before the producer gets paid? He said he gets paid at the end of the project. He's done re-shoots etc..., and is apparently looking at doing more. Exactly how he can work on a project like this without a cash flow is beyond me, but I guess that's a moot point.

I've already put a lot more into this project than I had originally figured on, and they've gotten a heck of a product for the price. Also, as I said, I expect to make some revisions, but at what point do you say "enough already" and start adding costs? I'm not about to make an endless number of revisions and wait to get the final payment when the client is finally happy (which is pretty much never). Should I ask for final payment since I've delivered the (tentative) final product, even though the project as a whole hasn't gotten the final stamp of approval?
Needless to say, I'm not doing any more jobs without a signed letter of agreement.

Any opinions are greatly appreciated.


06-24-2003, 10:53 AM
send a bill to them.... I wouldn't officially call it "done" until publication time. However, if your part is done, send the invoice, with a notice that payment will be considered late after x date (maybe one month or so...). If they don't pay at all, you do have some recourse... if nothing else, Credit Reports and the Better Business Bureau may be able to help you out if it comes to that.

06-24-2003, 11:03 AM
Yep, I'd send a bill too.
In the future, make sure you get all your approvals in writing, and try to get as much as possible approved, that way, if the customer changes his mind later on, he has to pay for it.
We usually charge 30% down, 30% upon layout approval, 40% upon completiton.
I hope you get your dough soon, with little hassle!

06-24-2003, 11:37 AM
Get this manual... http://www.gag.org/pegs/index.php

It will cover all the questions you have regarding contracting and working agreements with clients. Also pricing and copyrights, and how to protect those rights.

It may cover video issues specifically too, but I'm just transistioning from Print Graphics to Video Graphics and haven't brushed up on Video information yet. But it includes most everything else.

You might consider joining the Guild too. LOTs of like-minded helpful people.

John Fornasar
06-24-2003, 03:33 PM
In addition to all the above, you'll find alot of info on the video sites and some of their magazines. Lots of people have gone through this.

I delivered over two weeks ago

If you end up in the same position again, bring your render in a smaller resolution than needed (you can also bring a few full res stills to prove quality).

Get any revisions marked off, and do the same thing with the final - you are trading your product for their cash. Sometimes it has to be done this way at the beginning.

Once you are established you'll see the need for a lawyer, at least to read over the contracts. A media savvy lawyer is best.

Good luck, and let us know if you get paid...

06-24-2003, 04:16 PM
If the things they want changed were not part of the original proposal they are variations and should be charged as extra's.

06-24-2003, 04:21 PM
Before you start work arrange (written agreement) to be paid in stages, the client pays for each completed stage, if the project dies mid way through or something, you would at least receive something for your efforts.

Bionic Antboy
06-24-2003, 04:35 PM
Originally posted by uberslayer™
If the things they want changed were not part of the original proposal they are variations and should be charged as extra's.

Exactly. If you originally delivered what you were contracted to do, and they want "overwhelming" revisions, not based on what you did, but because of other creative decisions, then they gotta pay. Of course, if they agree to sign a newly drafted letter of agreement that stipulates what you've already been paid as well, you can give them time.

I'd tell them at this point, you want to be paid, and then you'd be willing to talk about any changes.

The way our company works is that we get just about EVERYTHING nailed down when we're making commercials. If we finish a post job, whether animation, sound or picture, then there are revisions made to the script, the client knows up front that there will be additional charges. Sometimes, what the client thinks "overwhelming" revisions may actually be a lot easier to you as well.

Bottom line? Get as much in writing as possible.

06-24-2003, 11:07 PM
This may be of some interest to you...


It was posted by Brett Beanan on the VT Third Party Forum.

06-25-2003, 07:21 AM
Thanks for all the insight folks!
I guess it's all part of the learning process, and that in a perfect world there wouldn't be a need for contracts, but we all know how perfectly things always go.
I'll definitely look at getting approvals in writing as the project progresses. To be honest, getting "approvals" out of them has been tricky enough, let alone getting it in writing, though I guess it's gotta be done.
It really all boils down to the signed agreement, or lack thereof. Changes, extras, etc... were pretty much covered. I did figure that there might be some tweaks that would need to be made, but I'm drawing the line at major revisions.
I believe this is the first time the producer has outsourced for animation work, so maybe I'll give him that (though not to my detriment). He has been in business for a while, but as I said, I gotta wonder how he works things with his clients as he seems to be stuck in a seemingly open-ended situation as well.
Oh well, Live and learn.
Thanks again everybody!


06-25-2003, 07:27 AM
Hi ChrisS,
just to open up my collection of bad (and good experiences) a bit more...
The funny thing is, most deals I did where everything had to be fixed in a contract (on the customers behalf) ended up tourning sour. I have the best relations with people I don't do contracts with (just the usual written offer that outlines the job and the work to be done), even in times of stress or disagreement.
Oh, and people that don't like to pay a sum upfront, usually trouble you once they get the final bill. Larger customers seem to be more at ease than smaller ones. Not only are smaller customers more work (you spend the same amount of time - or even more since they tend to be new to the subject - in briefings, on the phone etc...), but for them your rates fell a lot higher than they feel for larger customers that are used to deal with large budgets...
Keep it rollin'

06-25-2003, 08:11 PM
Deleted by User

06-25-2003, 09:41 PM
This is an important topic for all of us really.

Would you (and the VT web staff) please consider a new Forum called BUSINESS FOR TOASTER USERS.

A place to discuss issues like the one's here.

Business, marketing, contracting and legal help and hints and of course not allow it to be used as advertising space for existing businesses. (unless it's offered in a manner teaching us how to do effective advertising, as an example...)

06-26-2003, 02:36 AM
Originally posted by sbrandt
Would you (and the VT web staff) please consider a new Forum called BUSINESS FOR TOASTER USERS.

Sounds good, but let's just call it business, I'm sure the Lightwave users (like me :) ), want to make some money too ;)

06-26-2003, 11:40 AM

06-26-2003, 03:19 PM
While it may not help your current situation, my suggestion is have 3 unflexable rules:

1. Charge by the hour.

2. Bill Monthly.

3. Make rough sketch storyboards before starting.

This solves many problems. It allows you to accept changes without worrying about how much money your going to loose, so anytime the client wants a change you can accept them with a smile.
It also puts the ball in the client's court, so if they want changes, they can look at their own budget and decide what they want to do.
The storyboards can take some time, but I guarantee they won't take as long as the revisions. Even if you do these for free. Plus they really cover your butt so there is no misunderstanding about what needs to be in the shot, and makes it easier for the client to accept responsibility for the changes.
Letting them know that you bill monthly ahead of time solves the "dragging of the feet" problem.
Now I do usually give a rough estimate of the time it will involve, usually broken down by the shot. But I make it very clear that this is an estimate only and the actual price will be defined by the number of hours it ends up taking. I will also ask if there is a particular budget involved, and if so, let them know that I will try to work within the budget, this usually involves reminding them that a particular item will probably not fall withen their budget when they ask for something like animated radiosity or something crazy like that.

Good luck.

06-26-2003, 03:28 PM
Thanks again folks.

After this situation, I'm definitely rethinking my pricing structure; either refine it or replace it entirely. The hourly billed monthly is an interesting way to do it.

I'm actually on my way out the door to (finally) meet with him and try to get this job in the can.
I'll keep y'all posted!


06-30-2003, 08:07 AM
Well, met with the producer on Thursday, and picked up the check Friday.
It was actually no problem and he was very cool about it. Guess it never hurts to ask (not to mention, with the client he's dealing with, I'm the least of his problems).
My concern was in asking for the payoff before the project as a whole was done. I didn't really know what the normal routine was and didn't want to come off as a pain as there's potential for more work with him in the future.

I had to make some revisions, which he said that if we need to up the costs then so be it. Though it took the majority of the weekend to re-render them, I'm not going to add any charges as it feels like a good point for a clean ending, and he knows and is in full agreement that from this point on, any changes will be extra.

I drop off the revisions this morning and job #1 is in the books. :D

06-30-2003, 09:01 AM
Hi ChrisS,
*sob* *sniff* what a happy end :)
I'm glad everything worked out fine for you.
If the chemistry you have with the producer is good, then everything else will fall in place.
Congratulations and the best of luck for the future!

06-30-2003, 01:43 PM
Yeah, I'm a sucker for a happy ending, especially when it involves cash! ;)
None too soon either. Just got my order in for the x.x-7.5/8 upgrade with DFX+